Overseas to Domestic Dividend ETF 'Money Move'

PLUS High Dividend Stock ETF Surpasses 600 Billion KRW in Net Asset Value
Attracts Investors with Stable Monthly Dividends and Tax Advantages
Domestic Dividend Stocks Gain Popularity Amid Market Changes

Hanwha Asset Management announced on the 4th that the 'PLUS High Dividend Stock' Exchange-Traded Fund (ETF) has surpassed 600 billion KRW in net asset value.

According to the Korea Exchange Information Data System, the 'PLUS High Dividend Stock' ETF recorded a net asset value of 604.3 billion KRW as of the closing price on the 2nd. Significant capital inflows have continued this year, with individual net purchases amounting to 13.01 billion KRW.

Hanwha Asset Management analyzed that the recent reform of the foreign tax credit system has increased the attractiveness of domestic dividend ETFs compared to overseas dividend ETFs, which has also influenced the capital inflow into the 'PLUS High Dividend Stock' ETF.

The National Tax Service used to refund taxes on distributions from overseas funds and ETFs in tax-advantaged accounts first, then withhold taxes later. Under the revised system, taxes are withheld first and then settled afterward, eliminating the tax deferral effect on distributions from most overseas funds and ETFs in tax-advantaged accounts. In contrast, domestic dividend ETFs still enjoy the tax deferral effect on distributions within tax-advantaged accounts.

With the entry into an aging society, investors’ need for stable income, government policies such as the introduction of advanced dividend systems and value-up policies, and voluntary shareholder return policies by listed companies are converging, leading to growing interest in domestic dividend stocks.

The 'PLUS High Dividend Stock', the largest dividend ETF investing in domestic stocks, pays a monthly dividend of 63 KRW per share. Its greatest appeal lies in providing stable cash flow based on predictable dividend income, which is attractive to retirees or investors seeking to cover part of their living expenses through dividends.

Considering dividend reinvestment, the 'PLUS High Dividend Stock' has posted returns of 4% year-to-date, 16.6% over the past year, and 37.4% over three years as of the 2nd, outperforming the KOSPI 200 during the same periods.

Geum Jeong-seop, Head of ETF Business Division at Hanwha Asset Management, stated, "In the domestic market where prominent growth stocks are decreasing, dividend stocks are noteworthy," adding, "Changes such as the reform of the foreign tax credit system, aging society, and value-up policies are enhancing dividend stock returns."

He further noted, "Domestic companies are likely to increase dividends more competitively in the future," and "As growth in the domestic market stagnates and expectations for stock price increases decline, investors are placing greater importance on dividends."